'Fiscal Cliff' Deal Won't Guarantee Growth: El-Erian

Even if Washington reaches a deal on the "fiscal cliff", strong growth in 2013 is far from guaranteed, Pimco's Mohamed El-Erian told CNBC on Monday.

As Congress and the White House haggle over ways to prevent some $600 billion in automatic tax hikes and spending cuts from damaging the economy, El-Erian said the U.S. still faces a protracted period of soft growth.

Anticipating higher taxes, and discussing whether Washington is closer to a deal on the fiscal cliff, with Mohamed El-Erian, PIMCO CEO & co-CIO. "You will see tax rates go up, and they will be part of a bigger package, and they will hopefully be a stepping stone to other things that need to get done in Washington," he says.

El Erian voiced confidence that a deal would be reached by Christmas, though he said key players should avoid letting details trickle out too early and torpedo political support.

"The deal is important…because if we don't get one, this economy goes into recession and that's the last thing we need," the fund manager said.

Still, "we need this as a building block for a lot of other decisions going forward: the debt ceiling, the annual budget, the labor market, housing finance," he added. "There's a ton of things on the plate of politicians."